Prime Minister David Cameron ran into some unexpected opposition from his European peers during the negotiations that took place overnight in Brussels to keep the UK within a reformed European Union.

Eastern European countries are looking to place a strict time-limit on the length of any caps on social benefits for migrants, while France is reportedly pushing against increased protections for the City versus rival financial centres within the single currency area.

Following the first day of negotiations, which lasted until the early hours of Friday morning, David Cameron said: "I was here until 5am working through this. We have made some progress but there's still no deal.

"I've said I will only do a deal if I can get what Britain needs. So I'm going to get back in there and do everything I can."

According to the president of the European Council, Donald Tusk, who was the lead-person in the negotiations with the UK: "We have made some progress but a lot still remains to be done.”

Cameron was fighting to reach an agreement on Friday, on the second and last day of the summit, with analysts saying that could open the way for the referendum to be held as soon as 23 June.

The prime minister reportedly pushed on Thursday for the so-called brake in benefits to be applicable for a total of 13 years, whereas some Eastern European countries had tried to place the limit at five years, with a German official having said on Wednesday that seven years would be a good point for starting discussions.

As regards the future of the City, arriving at the summit on Friday morning, Francois Hollande said: "Since last night, there are proposals that have been changed, notably on what concerns France - the wish to have a financial regulation system which is valid in all parts of Europe, and that there should be no right of veto or prevention."

Xavier Bettel, Luxembourg's prime minister said he was hopeful there would be an agreed text "at the end of the afternoon".

The latest date by which a deal could be agreed and regulations laid in parliament to hold the referendum in the summer was 3 March, Morgan Stanley said in a research report sent to clients on 12 February.

"We think that the political and economic uncertainty from a vote to Leave would be a negative shock for investment,confidence and growth, keep policy on hold, or even easing, and hit risky assets," Morgan Stanley said.